Signup for disaster aid won't occur until summer

Speaking at its annual Agricultural Outlook Conference in Arlington, Penn said USDA has several other priorities it must complete before it begins signup for the $2.1 billion in assistance for crop producers authorized in the Agricultural Assistance Act of 2003.

"First, we have the April 1 deadline for signup for direct and counter-cyclical payments under the new farm bill," he told reporters. "Then, we want to have a general signup for the Conservation Reserve Program, the first in several years. Then, we have to write the software for the Livestock Assistance Program.

"We plan to start sign-up for the Livestock Compensation Program in June," he said. "I wanted to be conservative so I said we would start the signup for the crops assistance in summer. It’s just a big order laid on top of a big order."

The Agricultural Assistance Act, passed as part of the FY2003 omnibus appropriations bill, authorizes payments to farmers who suffered losses of at least 35 percent of their normal crop in 2001 or 2002. The payments will be made at 50 percent of the average price if the grower had federal crop insurance and 45 percent if he did not.

Working group

Penn said USDA is setting up a working group for the disaster assistance program similar to the Farm Bill Working Group that has led the department’s implementation of the Farm Security and Rural Investment Act of 2003.

"So far, we have met most of the deadlines that Congress set for the new farm bill," he said. "We have made $1.3 billion in direct payments and $712 million in counter-cyclical payments to cotton, rice and peanut producers who have suffered from below normal prices."

Earlier, Keith Collins, USDA’s chief economist, said that the slow pace in signups for farm programs last year resulted in over $4 billion in payments to farmers being shifted from 2002 to 2003, Collins says. As a result, more farmers had to extend loans, and the impact was felt throughout the agricultural sector, with fewer purchases of machinery and other farm goods.

Considering that 30 percent of the eligible farmers probably will not make any changes to their acreage bases or yields as permitted under the new farm bill, Penn said he believes the signup for direct and counter-cyclical program payments is "approaching 75 percent.

"We will spend the six weeks or so remaining until the April 1 deadline helping farmers complete their enrollment in the direct and counter-cyclical payment program," he said.

He noted that the new farm bill also established a marketing loan for peanuts for the first time and included a new counter-cyclical payment for the crop. "Congress also authorized a peanut quota buyout," he said. "They appropriated $1.3 billion for that program and we have spent $1.2 billion."

Conservation funding

The new farm bill also provided much higher funding levels for conservation programs, including funding increases for the Environmental Quality Incentives Program totaling $5.5 billion. USDA, which recently asked for comment on new rules for the program, expects to begin signup for EQIP this spring.

"We have not had a signup for the Conservation Reserve Program since 2000, and we anticipate announcing a new enrollment period in the second quarter of this year," he said.

USDA programmers, meanwhile, will also be writing new software for the disaster bill’s Livestock Assistance Program, "which we have not had a signup for in several years," he said. "We don’t think that can be completed until late spring.

"This disaster assistance program will be more complex than many realize, and it will challenge our already fully employed FSA offices," he said.